Assignments: Corp Fin Reprtn xQuestion 8 - E&P Set #5 (Revie xM Inbox (1,094) ep6778a@stud x M (no subject) - ellse.patipevo.mheducation.com/ext/map/index.html?_con3Dcon&external_browser=0&launchUrl=https%253A%252F%252Flms.mheducation.com%252F...Review) iНеOn August 1, 2021, Limbaugh Communications issued $30 million of 10% nonconvertible bonds at 104. The bonds are due on July 31,2041. Each $1,000 bond was issued with 20 detachable stock warrants, each of which entitled the bondholder to purchase, for $60,one share of Limbaugh Communications' no par common stock. Interstate Containers purchased 20% of the bond issue. On August 1,2021, the market value of the common stock was $58 per share and the market value of each warrant was $8.In February 2032, when Limbaugh's common stock had a market price of $72 per share and the unamortized discount balance was $1million, Interstate Containers exercised the warrants it held.Required:1. Prepare the journal entries on August 1, 2021, to record (a) the issuance of the bonds by Limbaugh and (b) the investment byInterstate.2. Prepare the journal entries for both Limbaugh and Interstate in February 2032, to record the exercise of the warrants.Complete this question by entering your answers in the tabs below.Required 1Required 2Prepare the journal entries on August 1, 2021, to record (a) the issuance of the bonds by Limbaugh and (b) the investment byInterstate. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter youranswers in millions and round to 2 decimal places (I.e., 5,500,000 should be entered as 5.50)).Vlew transaction listJournal entry worksheet1.2.< Prev8 of 12Next >IMG-0582.jpgIMG-0583.jpgacct780hey.zipQuestion 2 2.docxMacBook Air114F5941000

Answer 1 Journal Enteries Journal entry is type of accounting entry that is used to record…

Answered: Limbaugh Communications issued $30…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On march 1 2023, Star corporation issue P500,000 of 10%, 7 year bonds with 1 taxable warrants attached to each P1,000 bond. each warrants provides for the right to purchase 20 shares of P15 ordinary shares for 20 each. The market value of the ordinary shares was P25 per share on july 1, 2023. the detachable warrants market price was P70 per warrant and the arket value of the bond without the warrants attached is P104. The bond was sold at 107. How much is the Premium or Discount on the issuance of bonds? P20,000 How much is the warrants outstanding? P15,000 Show full solution
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1, 202 Remy Corporation issued $1,000,000 of 8% nonconvertible bonds at 104, which are due on February 28, 2041. In addition, each $1,000 bond was issued with 25 detachable stock warrants, each of which entitled the bondholder to purchase for $50 one share of Remy common stock, par value $25. The bonds without the warrants would normally sell at 95. On March 1, 2021, the fair value of Remy's common stock was $40 per share and the fair value of the warrants was $2.00. What amount should Remy record on March 1, 2021 as paid-in capital from stock warrants? $73,600 $85,200 $52,000 O $104,000 ASA
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On September 1, 2025, Splish Company sold at 104 (plus accrued interest) 5,760 of its 9%, 10-year, $1,000 face value, nonconvertible bonds with detachable stock warrants. Each bond carried two detachable warrants. Each warrant was for one share of common stock at a specified option price of $14 per share. Shortly after issuance, the warrants were quoted on the market for $3 each. No fair value can be determined for the Splish Company bonds. Interest is payable on December 1 and June 1. Prepare in general journal format the entry to record the issuance of the bonds. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date September 1, 2025 Account Titles and Explanation Cash Bonds Payable Premium on Bonds Payable Paid-in Capital-Stock Warrants Interest Payable Debit 6120000 Credit 5760000 207360 23040…
On March 1, 2021, E Corp. issued $1,000,000 of 10% nonconvertible bonds at 104, due on February 28, 2031. Each $1,000 bond was issued with 50 detachable stock warrants, each of which entitled the holder to purchase, for $60, one share of Evan's $30 par common stock. On March 1, 2021, the market price of each warrant was $4. By what amount should the bond issue proceeds increase shareholders' equity?
On September 30, 2023, Sunland Inc. issued $3,280,000 of 10-year, 8% convertible bonds for $3,772,000. The bonds pay interest on March 31 and September 30 and mature on September 30, 2033. Each $1,000 bond can be converted into 80 no par value common shares. In addition, each bond included 20 detachable warrants. Each warrant can be used to purchase one common share at an exercise price of $15. Immediately after the bond issuance, the warrants traded at $3 each. Without the warrants and the conversion rights, the bonds would have been expected to sell for $3,444,000. On March 23, 2026, half of the warrants were exercised. The common shares of Sunland were trading at $20 each on this day. Immediately after the payment of interest on the bonds, on September 30, 2028, all bonds outstanding were converted into common shares. Assume the entity follows IFRS. (e) Your answer is partially correct. Prepare the journal entry to account for the exercise of the warrants on March 23, 2026. (Credit…
Smart Inc. issued P7,500,000 face amount of 12% convertible bonds at 110 on January 1, 2020, maturing on January 1, 2024 and paying interest semi-annually on January 1 and July 1. It is estimated that the bonds would sell only at 105 without the conversion feature. Each P1,000 bond is convertible into 10 ordinary shares with P100 par value. What is the increase in shareholders' equity arising from the original issuance of the convertible bonds? a. Zerob. P 150,000c. P 375,000d. P 750,000
On March 1, 2020, ABC Company issued P5,000,000 of 12% nonconvertible bonds at 103 which are due on February 28, 2025. In addition, each P1,000 bond issue was issued with 30 detachable share warrants, each of which entitled the bondholder to purchase for P50 one ordinary share of ABC Company par value P25. On March 1, 2020, the quoted market value of each warrant was P4. The market value of the bonds ex-warrant at the time of issuance is 95. What amount of the proceeds from the bond issue should ABC record as an increase in shareholders' equity? Round answer to whole number.

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